Realtors are facing an unprecedented number of buyers backing out of home purchase agreements, as individuals become increasingly selective amid challenging market conditions.
In June alone, nearly 56,000 home-purchase agreements were canceled, which represents 15% of all homes that went under contract during that month. This statistic marks the highest percentage recorded for June by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning in a costly market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” she explained.
Rafael Corrales, a Redfin agent in Miami, reported witnessing challenging situations, including last-minute cancellations over trivial details. In Miami, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes under contract in June. Corrales noted that the primary concern remains affordability.
The median home sale price hit an all-time high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Prospective buyers also face additional costs such as insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been impacted by inflation.
This lack of affordability has led to the most significant decline in home sales nationwide in eight months, as reported by Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decrease since October 2023. When compared to the previous year, home sales dropped by 1.1% and were 21.5% lower than pre-pandemic levels.